Riot Games cuts 11% of its workforce to focus on core games

Riot Games is making headlines after announcing plans to cut 11% of its staff (or 530 people).

Riot Games cuts 11% of its workforce to focus on core games
"Game for Peace", Tencent's alternative to the blockbuster video game "PlayerUnknown's Battlegrounds" (PUBG) in China, is seen on a mobile phone in this illustration picture taken May 13, 2019. REUTERS/Florence Lo/Illustration/File Photo

The backstory: Riot Games, founded in 2006, is a major player in the gaming industry, known for games like League of Legends and Valorant. It focuses on two main types of games: multiplayer online battle arena (MOBA), where teams compete strategically, and first-person shooter (FPS), which is essentially when players watch the in-game events from their character's viewpoint. Based in Los Angeles, Riot Games is known for being insanely popular, and it also organizes competitive esports leagues and events for its games. 

More recently: In 2011, Tencent, the Chinese tech giant, acquired a majority equity stake in Riot Games, upping its equity in the company to 92.78%. Now, in the last several years, Riot Games has expanded a lot. Specifically, it's doubled over half its headcount as it bet on different things across the company. New experiences were created, the company's portfolio was expanded, and new global markets were tapped into. 

The development: Now, Riot Games is making headlines after announcing plans to cut 11% of its staff (or 530 people). CEO Dylan Jadeja says it's because the company took on too many projects, which has caused it to not be focused enough. This restructuring includes refocusing on key games like League of Legends and downsizing teams working on games that aren't performing well, like Legends of Runeterra. The company is offering support to affected employees with six months' salary, bonuses, career assistance and personal computers. 

Key comments:

"For most of our history, we've managed to avoid days like this, but this decision is critical for the future of Riot. This isn't to appease shareholders or to hit a quarterly earnings number—it's a necessity. Over the past few years, as Riot more than doubled in headcount, we spread our efforts across more and more projects without sharp enough razors to decide what players needed most. The adjustments we're making aim to focus us on the areas that have the greatest impact on your experience while reducing investment on things that don't. 

This means we're eliminating about 530 roles globally, which represents around 11% of Rioters, with the biggest impact on teams outside of core development," wrote the company in a blog post.

"Today, we're a company without a sharp enough focus, and simply put, we have too many things underway. Some of the significant investments we've made aren't paying off the way we expected them to. Our costs have grown to the point where they're unsustainable, and we've left ourselves with no room for experimentation or failure – which is vital to a creative company like ours. All of this puts the core of our business at risk.

While we'd love for this news to remain within our virtual walls, we know that's not realistic; there are many members of our global community who care deeply about the people who make and support their favorite games. With that in mind, I'm going to share this email publicly on in the hopes that it answers most of their questions so you don't have to," said Riot Games CEO Dylan Jadeja in an email to its employees.